Prasit photo/Getty Images
Ellevest, a woman-focused robo-advisor, is set to hand off a majority of its clients to Betterment, the largest independent digital investment advisor in the U.S.
If all goes according to plan, the transition is expected to wrap up by April 17, according to a Feb. 26 joint press release by the companies.
Under the terms of the acquisition, Betterment will integrate Ellevest’s automated investing accounts and assets under management into its platform. However, Betterment won’t take on Ellevest’s employees, technology or operations.
What this means for Ellevest clients
Clients of Ellevest will have the option to opt out of the transfer, but they must do so by April 10, according to a Feb. 25 Ellevest email obtained by Bankrate.
If Ellevest customers choose not to opt out, their accounts will automatically transfer to Betterment on April 17 after a six-day blackout period during which they won’t have access to their accounts.
Ellevest clients transitioning to Betterment will gain access to automated investment features, including diversified portfolios, tax-loss harvesting and planning resources. They’ll also have access to human advisors, as well as new offerings, like joint accounts and a cash management account.
However, mutual funds held in Ellevest accounts will be liquidated prior to the transfer, which may trigger tax implications for some customers.
Pricing is another key change for Ellevest clients. Betterment’s fee structure starts at $4 per month for accounts under $20,000, a significant reduction from Ellevest’s current $12-per-month fee. For balances over $20,000, the fee shifts to 0.25 percent annually, while clients with more than $100,000 in assets can opt for a Premium plan at 0.65 percent annually.
Ellevest’s new focus
Following the transition, Ellevest will continue to provide financial planning and wealth management services to high-net-worth individuals and institutions with at least $500,000 in assets.
The company, founded roughly a decade ago to support women’s financial empowerment, is shifting its strategy toward serving clients with more complex financial needs, according to the joint press release.
As of March 2024, Ellevest had approximately $2 billion of assets under management.
What’s next?
For clients who prefer to transfer their investments to another brokerage, they must complete an Automated Customer Account Transfer Service (ACATS) form. They’ll also need to provide the DTC number — 728 — of Ellevest’s company custodian, Goldman Sachs Custody Solutions, to the new broker, along with their Ellevest account number.
For Ellevest clients who do not transfer their accounts to Betterment or another broker, Goldman Sachs Custody Solutions may impose trading restrictions, potentially limiting transactions to liquidations only, according to an email sent to customers.
Once accounts are moved to Betterment, clients will have a 30-day grace period to transfer their funds elsewhere without penalty. After that, a $75 transfer-out fee will apply.
This acquisition marks another expansion for Betterment, following its purchase of Goldman Sachs’ Marcus Invest accounts in 2024. Betterment now serves over 900,000 customers with more than $55 billion in assets under management.
Read the full article here
